Ride-share battle ends as Didi buys Uber China

Women hold their smartphones showing the ride-hailing apps Uber Technology Ltd. (left) and Didi Chuxing at a residential compound in Beijing on Monday. (Photo: AP)

Chinese ride-sharing giant Didi Chuxing will take over the China operations of its US rival Uber, it said Monday, ending a ferocious battle for market share that cost both firms billions.

In exchange for the Uber China assets, Uber and its Chinese partners will receive shares equivalent to 20 per cent of Didi Chuxing, a statement said.

The combined Chinese firm will be valued at $35 billion, Bloomberg News reported.

Since Uber launched its China operations little more than two years ago both companies have spent billions of dollars on subsidies for drivers and passengers in China, as well as trading vitriolic accusations, as they fought for dominance in the potentially lucrative market. But now their founders will swap public acrimony for seats on each other’s boards, with Uber CEO Travis Kalanick joining Didi’s board of directors, and Didi’s founder Cheng Wei getting a seat at Uber’s top table.

In the Didi statement Cheng said the two firms “have learned a great deal from each other over the past two years in China’s burgeoning new economy”.

Earlier in 2016 Uber said it lost $1 billion annually in China, and Didi was thought to be dropping similar amounts of money.

A lengthy post on Kalanick’s verified Facebook page Monday called Uber’s battle in China a “big, bold idea” and “one of the most rewarding experiences I’ve had as an entrepreneur”.

“Most people thought we were naive, crazy — or both” because the firm was “a young American business entering a country where most US Internet companies had failed to crack the code”, he said.